AUDIT OF INVESTMENTS

INVESTMENTS

• Assets held by an entity for the accretion of

wealth through distribution such as interest,
royalties, dividends and rentals, for capital
appreciation or for other benefits to the investing
entity such as those obtained through trading
relationships.
 INVESTMENTS

1. Trading securities of Financial assets @ FVPL

2. Financial assets @ FVOCI
3. Investment in Equity Securities
4. Investment in bonds or FA @ Amortized cost
5. Investment in Associate
6. Investment in Subsidiary
7. Investment in Property
8. Investment in fund
9. Investment in joint venture
 AUDIT OBJECTIVES AND PROCEDURES

Assertions
Assertions Audit
Audit Objectives
Objectives Audit
Audit Procedures
Procedures
Existence
Existence or
or Occurrence
Occurrence To
To determine
determine that
that investments
investments 1.
1. Obtain
Obtain or
or prepare
prepare aa listing
listing
in
in securities
securities (shares,
(shares, bonds,
bonds, of
of securities
securities and
and
notes)
notes) physically
physically exist
exist and
and in
in investments
investments owned
owned by by the
the
loans
loans and
and advances
advances exist.
exist. company
company andand related
related
revenue
revenue accounts
accounts andand
reconcile
reconcile to
to the
the general
general
ledger.
ledger.
2.
2. Inspect
Inspect securities
securities onon hand.
hand.
3.
3. Obtain
Obtain confirmation
confirmation of of
securities
securities held
held by
by others.
others.
 AUDIT OBJECTIVES AND PROCEDURES
Assertions Audit Objectives
Completeness To determine that investments
are all included in the
statement of financial position.
Rights and Obligations To determine that the
company owns or has
ownership rights to all
investments included in the
statement of financial position.
Audit Procedures
4. In addition to audit
procedures 2 and 3, vouch
selected purchases and sales
transactions of securities
during the year.
5. In addition to audit
procedures 2 and 3, verify the
clients’ cutoff of securities
transactions.
6. Perform analytical
procedures.
7. Compute independently
revenue from securities.
 AUDIT OBJECTIVES AND PROCEDURES
Assertions Audit Objectives
Valuation To determine that investments
are valued properly in
accordance with generally
accepted accounting principles.
Presentation and Investments are properly
Disclosure described and classified in the
statement of financial position
and related disclosures are
adequate.
Audit Procedures
8. Determine market value of
securities at statement of
financial position date.
9. Evaluate the method of
accounting for securities.
Evaluate financial statement
presentation and related
revenue or loss accounts.